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Growing Demand for Bundled Triple Play Internet Service Packages

Someday you might use one Internet service to go online, watch videos on demand and chat on the phone. Sounds like an episode of the Jetson’s, but that day is rapidly approaching.

Cable companies are beginning to offer low-cost Voice-over-IP phone service (VOIP) as an alternative to standard phone company arrangements and combining it with television and broadband Internet service. Telephone companies are rolling out digital networks that can handle VOIP service and either collaborating with satellite companies to add entertainment options or creating their own fiber-optic networks for digital TV service.

Currently, combined basic cable TV, phone and broadband service might cost from $100 to $150 per month. For example, Comcast's all-in-one service plans will be somewhere around $130 per month. Cox offers a basic plan for about $125 a month. Verizon, SBC, BellSouth and Qwest have packages that include phone service, DSL, satellite TV entertainment packages and wireless phone service. Some combinations of local and long-distance calling, DSL and DirecTV service cost less than $150 a month.

Cablevision has had success of with its Optimum Triple Play package. The package combines standard digital video, cable modem and voice-over-IP (VOIP) products for $29.95 each, or a total of slightly less than $90 per month for the first year of service.

Driving this competition is the demand for triple-play. In two separate surveys, 81 percent of European broadband subscribers and 82 percent of U.S. broadband subscribers indicated that they are interested in combined phone, Internet and video services. Convenience seems to be the most important selling point. Respondents who were interested in receiving all three services from one source indicated that it would be more convenient overall and said that they would prefer to pay one bill for all three services. That added convenience would also justify switching providers in order to receive combined voice, video and high-speed data services.

At this point, consumers are faced with a number of questions: Should you choose an Internet service and cable TV combination or select a three-in-one situation (TV, phone and Internet service)? What are the benefits of merging multiple services with one source? Or would it make more sense to stick with what you have and deal with a handful of companies separately?

Depending on the number of hours spent on the internet, the volume of long distance calls, and the amount of time watching TV, bundling services probably makes sense for many people.